Investments in malls in the country skyrocket
DCI
While in the North American market there may occur a strong concentration in the shopping mall sector with a possible merger of the two largest mall companies of that country - Simon Property Group and General Growth Properties (GGP) -, in Brazil all major players confirm high investments, making competition stronger and stronger. That is the case of BRMalls, one of the leaders of the segment in the national territory, which strengthens the optimism after obtaining historical results for the company in the first quarter, closing the period with more than R$ 1 billion (US$ 571.4 million) in cash to carry out new acquisitions. The company confirmed R$ 900 million (US$ 514.3 million) in investments until 2012 and bets on new projects of malls aimed mainly at the middle class, and at the expansion of malls it already has.
According to the CEO of the company, Carlos Medeiros, the company continues "seeking and analyzing opportunities to make acquisitions" and it is ahead of schedule in the works of two new malls, one in Sete Lagoas (MG) and one in Granja Viana (SP), which are already 86% and 93% sold and should be opened in October and November this year, respectively. Besides them, there are three other projects under development. The company should grow and gain 46 thousand square meters of gross rentable area (ABL, in Portuguese) - which represents 10% of its current area - with the seven expansion projects in progress. The largest one of them is Shopping Tamboré (SP), which should be opened in the first quarter of 2011 and 55% of it has already been sold.
Among the results of the first quarter that stood out in the company, which has interest in 35 undertakings is the growth of 31.7% of the net earnings, getting to R$ 106.3 million (US$ 60.7 million). Its net profit, however, which was of R$ 42.1 million (US$ 24.1 million), fell 9.8% compared to the R$ 46.6 million (US$ 23.7 million) of the first quarter of 2009, which was justified by the foreign exchange variation, since the company has debts in US dollars. The sales in comparable stores reached historical records with an increase of 16.2%, driven mainly by the recovery of the anchor stores. BrMalls stated it reached, for the third consecutive quarter, a record level of occupation in its malls, ending March with an occupation rate of 98.2%.
Another player that has already announced investments in new malls, for instance, is Cyrela Commercial Properties (CCP), which resulted from the spin-off of Cyrela Brazil Realty in 2007, and affirms that its area that should grow the most is the area of commercial centers, nearly doubling its participation in the earnings of the company, as well as foreseeing average investments of R$ 1 billion (US$ 571.4 million), taking into account the projects in progress and the intention of launching two new malls this year.